ABM News

Inside the Beltway : August 2011

USPS Financial Woes Show Need for Bold Reforms, Contingency Planning

The U.S. mailing industry expressed great concern earlier this month with the news that the U.S. Postal Service lost $3.1 billion in the third quarter of its Fiscal Year 2011.

Due to a dramatic decrease in First Class postage revenues, an outsized labor force and facilities infrastructure, and required payments for retiree benefits, the USPS will run out of money within 8-12 months if Congress does not act. While the USPS has said that it can continue until 2013 in this scenario, the viability of postal operations and delivery after the summer of 2012 are unclear (at best) without Congressional intervention. Further, ABM members will soon see increases in delivery times and may experience other operational delays as the Postal Service attempts to reduce costs, including the reduction of its processing facilities by 50%.

ABM is directly engaging with the Postal Service, Congress and other mailing groups to protect and inform members as developments warrant. Specifically, ABM is working with the Postal Service to help define vital processing infrastructure and critical entry times as they attempt to reduce expenses. ABM is also a Steering Committee Member of the central mailing coalition in Washington that is working with key policymakers and Congressional leadership to find a legislative solution that both protects mailing interests and places the Postal Service on a path for long-term sustainability.

As for what ABM members need to know now, plans should be made for postal rate increases of 2.5 to 3% in January related to CPI. While we think chances are slim, there is a slight risk of an additional 5% increase next year for products that are not currently covering their direct mailing costs. The potential for an additional increase is due to a recently-introduced legislative proposal on “underwater products” that ABM is fighting.

Looking ahead, ABM members may want to consider contingency planning in the event of Congressional inaction and a shutdown of the Postal Service. This seemingly-incomprehensible scenario is still unlikely, but as we have seen with the debt ceiling and recently with the Federal Aviation Administration (FAA), it cannot be automatically assumed that Congress will act in time to avert the shutdown of the Postal Service, and even a disruption of a few weeks could have serious consequences for our industry. In addition to this, it is highly likely that the Postal Service will move from six- to five-day delivery as early as next year, so mailers with daily or weekly products should begin planning for changes that will result from losing a day of delivery.

For more detail, please view this memo from ABM’s postal consultant, Jack Widener, and stay tuned to Inside the Beltway.

Court Rejects Freelance Writers’ Settlement with Publishers

A federal appeals court rejected a class-action settlement earlier this month in a case brought by freelance writers who accused publishers including Reed Elsevier, New York Times Co. and others of reprinting their works in online databases without permission, Reuters reported.

The 2nd U.S. Circuit Court of Appeals in New York ruled that the settlement was unfair because it shortchanged authors who did not register copyrights in their works. These authors represented more than 99% of the claims covered by the 2005 settlement.

Studies Influence Web-Tracking Debate

Academic studies of Web-tracking technologies are significantly influencing the ongoing public debate about Internet tracking and privacy. For ABM members and others who use tracking technologies, these studies signal the importance of fully understanding and disclosing your Web-tracking practices.

Most recently, within days after a University of California Berkeley study highlighted practices of the KISSmetrics tracking firm, that firm drastically changed its practices. According to the study, KISSmetrics, which provides analytical information regarding Web traffic, provided code that allowed website operators to track users regardless of which browser they used or whether they deleted their cookies. Wired magazine reported the study's finding on July 29, and by August 2 it followed up with the story that KISSmetrics had "quietly overhauled its Web-tracking methods over the weekend, and is now permitting users to block its surveillance."

Researchers at Berkeley and at Carnegie Mellon University have, over the last few years, issued a series of reports on tracking and privacy practices that have attracted attention in Congress, the regulatory agencies and consumer protection lobbies. One of the Berkeley researchers, Ashkan Soltani, advised the Wall Street Journal on its influential "What They Know" series last year. Several of the Journal reports were, in essence, popularized rehashes of academic studies by Soltani and others. And those Journal stories in turn led to a spate of class action lawsuits alleging inadequate disclosures of data-collection practices.

The lesson for ABM members? Keep on top of the technologies being used on your websites – not only the programs you use directly, but also those that your contractors (like ad networks and analytics vendors) use. Tell your techs to act like computer science Ph.D. candidates at top universities are looking over their shoulders – because, they are in fact doing so, virtually. And keep an eye as well on your privacy disclosures so that they fairly disclose the technologies you use.

Court: Government Needs Warrant to Access Mobile Location Data

A federal judge has said that the U.S. government should have to obtain a warrant before mobile phone providers must hand over customers’ geolocation data records.

According to Reuters, in an August 22nd ruling, U.S. District Judge Nicholas Garaufis wrote that the advent of cell-phone technology that can collect and store information about the geographic location of almost every American has made possible a "level of governmental intrusion previously inconceivable.”

If the government wants to access those records, it must first obtain a warrant based on probable cause, Garaufis ruled. Otherwise, such access would constitute a violation of Americans' Fourth Amendment protections against unreasonable search and seizure.

RESOURCE: ABM’s Government Policy Brief

ABM's quarterly Government Policy Brief outlines and prioritizes the key issues in Washington and their significance to members. Click here to view the latest edition.

CAN-SPAM Explained

The Federal Trade Commission, in an attempt to help businesses understand the CAN-SPAM law that governs email blasts, has put together a short video describing “seven things you need to know to comply with CAN-SPAM.”

The video’s message—that compliance is simple—is basically true, though ABM members that send email blasts on behalf of customers sometimes encounter more difficult questions—such as who’s responsible for what when party A sends party B’s email to party C. But ABM’s counsel are happy to help with those questions, and the video should help with the basics.

Budget Control Act Overview

The Budget Control Act of 2011 was signed into law by President Obama and enacted earlier this month to bring to conclusion the debt ceiling crisis, which had threatened to lead the United States into sovereign default on or around August 3rd.

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